2 Monster Stocks in the Making

Viking Therapeutics is advancing its pipeline in the burgeoning weight loss market, with its dual GLP-1/GIP agonist VK2735 undergoing Phase 3 trials for subcutaneous administration and having completed mid-stage trials for an oral formulation, alongside a Phase 2 candidate for MASH, VK2809, presenting significant growth potential despite inherent clinical-stage risks. Meanwhile, Axsome Therapeutics reported strong Q3 revenue of $171 million, a 63% year-over-year increase, primarily driven by its depression medication Auvelity, which is also poised for a potential blockbuster label expansion into Alzheimer's disease agitation, further bolstered by other approved products and a deep late-stage pipeline.

Analysis

Viking Therapeutics is strategically positioned in the rapidly expanding weight loss market, projected to reach $150 billion by 2035. Its lead candidate, VK2735, a dual GLP-1/GIP agonist, is in Phase 3 for subcutaneous administration and has completed mid-stage trials for an oral formulation, offering potential for increased patient access and affordability. The company also has VK2809 for MASH, which has passed Phase 2 studies, diversifying its pipeline.

Axsome Therapeutics demonstrates robust financial performance, with Q3 revenue surging 63% year-over-year to $171 million, primarily driven by its depression medication Auvelity. Auvelity, launched in 2022, is anticipated to achieve blockbuster status and offers substantial upside from a potential label expansion into Alzheimer's disease agitation, estimated to generate $1.5 billion to $3 billion in peak sales for this indication.

Beyond Auvelity, Axsome boasts a deep late-stage pipeline, including the recently approved migraine treatment Symbravo and candidates nearing regulatory submission for narcolepsy (AXS-12) and in late-stage trials for fibromyalgia (AXS-14). While Viking Therapeutics carries inherent clinical-stage risks, both companies present significant growth potential, with Axsome showing immediate revenue generation and multiple near-term catalysts.

Key Decisions for Investors

• Investors with an above-average risk appetite may consider Viking Therapeutics for its significant upside potential in the burgeoning weight loss and MASH markets, contingent on successful clinical and regulatory milestones for VK2735 and VK2809.
• Axsome Therapeutics presents a compelling growth opportunity, driven by strong Auvelity sales and substantial upside from its potential label expansion into Alzheimer's disease agitation, supported by a robust late-stage pipeline.
• Closely monitor upcoming clinical trial results for Viking's lead candidates and Axsome's regulatory progress, especially for Auvelity in AD agitation, as these will serve as critical valuation catalysts.